India’s Smart Cities Mission, 2015-2021: A Stocktaking – Report Overview

Nikitha Gopi 

Cities are confluences of people and dense spaces for multiple activities. It plays a major role in today’s age and time of cosmopolitism. It’s a place where people come in search of career opportunities, a place that gives people better access to education and health care services, a place where people are of diverse cultures and speak myriad languages, primarily a place that assures moderate and decent standard of living. Since people from different age categories and different walks of life have different expectations from cities, it is vital for the government to classify cities into three broad pillars – live-ability, economic-ability and sustainability.

This article provides an overview of a recent report entitled “India’s Smart Cities Mission, 2015-2021: A stocktaking” written by Rumi Aijaz, senior fellow at ORF, published by Observer Research Foundation (ORF).  

The Smart Cities Mission (SCM) was launched on 25th of June 2015 by the Ministry of Housing and Urban Affairs, as a lighthouse project consisting of small area development and pan city solutions in an integrated competitive manner. Around 100 cities and towns were selected largely from states like Tamil Nadu, Uttar Pradesh, Maharashtra, Karnataka, Madhya Pradesh and Gujarat, accounting to 1/3rd of country’s population. According to MoHUA, SCM aims “to drive economic growth and improve the quality of life of people by enabling local area development and harnessing technology, especially technology that leads to smart outcomes”, in other words, MoHUA claims “smart cities are cities that work for the people”

The SCM targeted more at providing ‘smart’ solutions to improve infrastructure and services like housing, water supply, sanitation, electricity supply, health, education, mobility, safety and security, IT connectivity and digitalization rather then them being mere urban-reform initiatives.

They aimed at approaching the mission with two distinct development strategies. One being Area-based development, which involves selecting areas of specified size. For example, in Chennai, the area of T. Nagar, spread over nearly 7 sq. km, has been chosen for development, retrofitting and greenfield development. The other one being Pan-city development where reforms are applied over larger areas of the city and expect outcomes at a larger scale.

Since this mission is a joint effort of governments and MoHUA, the mobilization of funds is shared between central and state/local government. A total of INR 1,000 billion for 100 cities were allocated for a period of 5 years. This further gets divided into INR 2 billion per city per year. Apart from the internal sourcing, they also have financial and technical advice from foreign countries like France, Germany, Japan, and the US. Further, they also borrow from bilateral and multilateral institutions, and the private sector.

Currently only 47% of the projects have been issued tenders worth INR 504.22 billion and only about 23% of the funds have been released, the share of centre being 13 percent and state being 10 percent. However, larger states have been noticed to issue more tenders while north-eastern states which are relatively smaller have fewer than 100 project tenders. The trend of larger states like Delhi, Karnataka having completed 70 percent of the project while states like Meghalaya not even nearing one indicates the slow and uneven progress of the mission.

According to ORF report the states that have so far seen the most progress are Tamil Nadu, Madhya Pradesh and Gujarat. States/UTs that require considerable improvement include Bihar, Punjab, Telangana, Puducherry, Meghalaya, Goa, Mizoram, Jammu and Kashmir, Sikkim, Assam, Lakshadweep, Dadra and Nagar Haveli, who evidently fall in the bottom five cities on progress. 

However, there is a general lag among the state governments in raising funds from external sources for the project. The current rate is 45% for all cities at which funds are released. A major challenge faced here is lack of proper functioning of the SPVs (Special purpose vehicles) and constant default in the system of not having a board or having several audit violations and etc. For instance, in Srinagar, the centre released INR 1.27 billion while the state/local government only released INR 200 million.

Another challenge they face is provision of adequate security to large volumes of data collected for SCM. Since cities majorly depend on sensors and network connected devices, the scope for practicing cyber crime is wide and thus government and citizens end up facing serious consequences, if not monitored carefully.

To conclude, the smart cities mission undertaken has indeed shown progress across wide range of projects in improving infrastructure and services of cities and towns. However, the implementation of the project at certain states are slow and there are inherent administrative and financial reasons for the underperformance. Further, the pandemic has impeded the process and exacerbated the situation more. 

Viewing all this, the ORF report aims at making a few recommendations:

  • Allowing SCM to be a long-term project rather not restricting it to a five-year period.
  • Arrangement of training programmes to build managerial and financial capacities of the staff employed by the SPVs and urban local bodies
  • Centre and state should put in greater efforts to mobilize funds. Generation of more revenue through efficient taxation, and alternate sources of financing.
  • The role of integrated command and control centres in cities should be expanded.
  • Smart cities should be made cyber secure by ensuring data security and encryption.
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This article presents an overview of the report “India’s Smart Cities Mission, 2015-2021: A Stocktaking” written by Rumi Aijaz, a senior fellow at ORF and published by Observer Research Foundation.

About the Author

Nikitha Gopi

Nikitha Gopi, Researcher, IMPRI.